Upward trend of quotes weakens in Brazil

Cepea, June 19 2019 – Corn prices oscillated in the Brazilian market in the first fortnight of June, closing the period 0.67% lower than on May 31 – in Campinas (SP), the ESALQ/BM&FBovespa corn Index closed at 38.30 BRL (9.84 USD) per 60-kilo on June 14. While high supply in Brazil kept purchasers refrained, unfavorable weather conditions in the US made Brazilian sellers unwilling to lower asking prices, since that scenario favors Brazilian corn exports – which, indeed, increased in the first half of June. In the first five working days of June, Brazilian corn shipments totaled 109.5 thousand tons, according to Secex. In May, Brazil exported 1.03 million tons of corn, 142% more than in April and a record for the month. The main destinations for the Brazilian corn last month were Iran and countries from the Middle-East.

Besides, on June 11, Conab (National Company for Food Supply) released a report indicating an increase in the first corn crop in northeastern and southern Brazil, but stability in the central-western region. As for the southeastern and northern areas of the country, the output is forecast to be smaller. Therefore, the first season is estimated at 26.3 million tons, and the second, at 70.67 million tons, a record. As a whole, corn production in Brazil is likely to amount 97.01 million tons, 20% larger than that in 2018/19.

Domestic availability (initial inventories + imports + production), in turn, would total 112.3 million tons, a record. Exports may total 32 million tons between Feb/19 and Jan/20, according to Conab, the highest in all times. Domestic consumption may total 62.91 million tons. As a result, ending stocks by January 2020 are likely to hit 17.38 million tons, 22% higher than that in the previous season.

HARVESTING – In Paraná, the harvesting had reached 12% of the second crop area until June 10, according to Seab/Deral. In Mato Grosso, Imea has reported that, until the first week of June, activities had reached 8.57% of the state area.